Tata Motors to raise $1 BN for passenger EV business from TPG Rise Climate

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TPG Rise Climate (along with its co-investor ADQ), shall invest in a subsidiary of Tata Motors that will be newly incorporated. TPG Rise Climate shall invest Rs 7,500 Cr in compulsory convertible instruments to secure between 11 % to 15 % stake in this company translating to an equity valuation of up to $9.1 bn.

TPG Rise Climate pursues climate-related investments that benefit from the strategic relationships developed across TPG’s existing portfolio of climate-focused companies, and a global network of executives and advisors. It is expected that the first round of capital infusion will be completed by March 22 and the entire funds will be infused by end of 2022. The transaction is subject to conditions precedent and customary approvals.

The new company shall leverage all existing investments and capabilities of Tata Motors Ltd and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies.

Over the next 5 years, this new company will create a portfolio of 10 EVs and in association with Tata Power Ltd, catalyse the creation of a widespread charging infrastructure to facilitate rapid EV adoption in India, a company statement said.